3 Amazing Benefits for First Time Home Buyers

That is not a lot of money, certainly not enough to cover the cost of a home. So how does a first-time buyer cope?

Thankfully, there are numerous benefits for first time home buyers to take advantage of. Here are the top 3 to help get you started.

Benefits for First Time Home Buyers

1. Program Offers

There are a number of benefits to be found in first time home buyer programs. These programs are designed to help the first-time homebuyer secure the home of their dreams.

Be sure you read through them carefully, some of the programs can really help you save!

Good Neighbor Next Door

The HUD-sponsored program allows for those in certain professions to get a 50% discount on the list price of homes located in revitalization areas. However, you must be willing to live in the home for a minimum of 36 months.

Dollar Homes

The HUD offers $1 houses that were foreclosed and obtained by the FHA. The list of houses is small, but it’s a program to consider.

Home Upgrade Program

The energy efficient mortgage program allows the home buyer to take out a larger loan to make energy efficient improvements to their home.

There is another option for buyers who wish to try taking on a fixer-upper. The FHA-backed HUD 203(k) loans will consider the value of your property after improvements are made, allowing you to borrow money as part of your mortgage so you can complete the project.

2. Tax Deductions

Many banks and lenders factor into the mortgage the cost of your real estate. They then put those amounts away into an escrow account.

The amount put into the account cannot be deducted, but the money used from that account to pay taxes can be deducted. This amount can be found on a 1098 form that your lender issues at the end of the year.

If you don’t use an escrow account, you can deduct any taxes that you pay out of pocket.

Plus, any taxes paid at settlement are good for deduction too. These can be found on the settlement sheet and should be kept track of. They will not appear on the 1098 form.

3. Interest on Mortgage

Unfortunately, first time home buyers are known for getting higher interests on their mortgage. However, this can be used to your advantage.

The home mortgage interest deduction tax benefit for homeowners allows you to deduct from your taxes the interest you have paid on your mortgage.

There are a few exceptions to this benefit, including:

Your mortgage cannot be over $1 million

Your mortgage must be secured by your home

Your home must be either your main or second home (this includes vacation homes)